Key points to remember:
- Japan’s Payment Services Act, revised in June 2023 and updated through 2026, created the strictest law in the world. stable coin issuer rules.
- Project Pax, backed by MUFG, SMBC and Mizuho, targets 1 trillion yen in B2B stable coin emission by 2028.
- JPYC became the world’s first fully regulated and yen-indexed system. stable coin under Type II license in October 2025.
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As U.S. regulators spend years sorting through jurisdictions and European regulators fine-tune MiCA compliance, Japan has responded. The country revised its Payment Services Act (PSA) in June 2023, classifying fiduciary-anchored services stable coins as electronic payment instruments, and spent the next three years building an institutional-grade ecosystem around this decision. Since April 2026, stable coins in Japan are not a retail product. These are national financial infrastructures.
The three-tier issuer model created by the PSA is what differentiates Japan’s approach from that of other countries. Commercial banks, trust companies and approved money transfer providers may each issue stable coinsbut each category is subject to strict reserve requirements. Trust issuers hold assets segregated in bankruptcy-proof structures. Money transfer providers hold 100% liquid reserves. Commercial banks issue tokens backed by deposits covered by deposit insurance.
A 2025 amendment allowed trust issuers to place up to 50% of their collateral assets in short-term instruments like Japanese government bonds, improving capital efficiency without relaxing consumer protections. October 2025 marked a practical milestone: JPYC Inc. became the world’s first issuer of a fully regulated yen-indexed security. stable coin after switching from a prepaid payment instrument to an electronic payment instrument authorized under a Type II funds transfer license.
The company has set a target of 10 trillion yen in circulation over three years. SBI Holdings and Startale Group followed with JPYSC, a bank-backed yen fiat. stable coin managed by SBI Shinsei Trust Bank, announced at the end of 2025 and targeting a launch in the second quarter of 2026. Institutional players benefit from remote asset protection in the event of bankruptcy. The corporate treasury teams responsible for these decisions sleep at night.
It’s in the history of B2B settlements that the numbers start to matter. Traditional international wire transfers incur all-in costs of 2 to 7 percent, including fees and exchange rate differences, and take three to five business days to clear. Stable coin the settlement reduces this to less than 0.5% of costs and installs in less than three minutes, 24 hours a day.
Project Pax, the joint initiative between Mitsubishi UFJ (MUFG), Sumitomo Mitsui (SMBC), Mizuho and blockchain Middleware company Datachain aims to issue 1 trillion yen (around $6.5 billion) of stablecoins by 2028. The platform connects more than 300,000 enterprise customers across the megabanks’ combined customer base. Mitsubishi Corporation already uses Progmat stable coins for settlements between its national head office and its foreign subsidiaries.
The architecture behind the Pax project is deliberate. Corporate clients do not touch a crypto wallet. They initiate payments through existing banking dashboards via SWIFT’s API framework. On the back-end, megabanks intercept this call and settle the value instantly using stable coin smart contracts routed through Ethereum, Polygon, Avalanche and Cosmos.
The SWIFT system remains in place as the customer interface. THE stable coin performs the actual moving of the value. Banks eliminate the costs of maintaining nostro and vostro accounts. The client’s accounting software never changes.
Overcoming trade bottlenecks in emerging markets
For companies trading in emerging markets, the PSA framework has also created a practical solution to a persistent problem. STANDAGE Inc. has partnered with Progmat to create a B2B trade settlement portfolio designed for Japanese companies working in regions where letters of credit face geopolitical or banking constraints. Real-time atomic settlement replaces the old trade finance bottleneck.
The stranger stable coin the story adds another layer. USDC was the first foreign stablecoin approved for Japanese exchanges, after Circle established a regulated joint venture with SBI Holdings, Circle SBI Japan KK, operating through SBI VC Trade. Japanese businesses can now execute cross-border digital dollar payments without having to manage multiple foreign fiat accounts. The US dollar remains the language of global commerce. Circle and SBI Holdings provided Japanese companies with a compliant pipeline.
Remittances follow the same pattern. Japan’s growing foreign workforce, particularly from Southeast Asia, creates constant outflows of money. Traditional retail money transfer operators charge spread fees which can be 5-10% of a salary. Licensed intermediary wallets built under the relaxed licensing of the 2025 Amendment Act allow workers to use yen stablecoins, convert them to dollar-pegged stablecoins on liquid decentralized exchanges, and route payments to their homes for local fiat conversion at a fraction of a cent.
SBI Holdings’ decade-long relationship with Ripple through SBI Ripple Asia has extended this infrastructure through corridors to South Korea, India, and the Philippines. Of note is the testing of the Korea-Japan corridor at the end of 2025. K Bank, Shinhan Bank and Nonghyup Bank have completed the verification of Project Pax’s cross-border remittance capabilities. Korean blockchain entities have signed agreements with JPYC Corporation.
The pilot tested B2B and B2C remittances using JPYC through this corridor, and the goal is explicit: Asian regional economies route trade and remittances without the US dollar as an intermediary. SBI Holdings Chairman Yoshitaka Kitao made this clear in December 2025. He described the shift to a token economy as “an irreversible societal trend.”
The infrastructure Japan has built between 2023 and 2026 makes this statement less about corporate optimism and more about an accurate reading of what has already happened.
